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 Merkel, once dubbed the "climate chancellor", hopes to revitalize
her green credentials by getting the G7 industrial nations to agree
specific emissions goals ahead of a larger year-end United Nations
climate meeting in Paris.
Climate change topped the agenda for Monday's sessions, at which the
leaders were also set to discuss combating epidemics and other
health issues, the fight against terrorism from Boko Haram to
Islamic State, and African development.
Merkel won support for her climate drive from French President
Francois Hollande, who will host a U.N. summit on fighting climate
change at the end of the year.
Hollande was also looking for an ambitious G7 commitment to ending
their dependence on fossil fuels by mid-century, and sought a
financial commitment to help poorer countries transform their energy
sectors so they can reduce carbon emissions.
 "Commitments must be made at this G7. For the moment, the communique
is going in the right direction," the French president told
reporters on the sidelines of the summit at the foot of Germany's
highest mountain, the Zugspitze.
The Europeans were pressing their G7 partners to sign up to legally
binding targets for reducing greenhouse gas emissions.
In a boost for Merkel's push to combat global warming, Japan said on
Sunday it would favor the G7 countries setting their own target for
reducing carbon dioxide emissions.
U.S. President Barack Obama kept his counsel on the climate issue on
Sunday, the first day of the summit, when leaders presented a united
front in facing Russian over the Ukraine conflict and discussed the
global economy.
Japan and Canada were regarded before the summit as potential
hold-outs on the climate issue, diplomats and environmental
campaigners said. It was not clear if Canadian Prime Minister
Stephen Harper would accept a specific G7 goal.
"Canada supports an agreement in Paris that includes all GHG
(greenhouse gas) emitting countries," Stephen Lecce, spokesman for
Harper, told Reuters in an email.
The green lobby is hoping that Merkel will push for a pledge to
phase out fossil fuels by 2050 ahead of the Paris meeting, which
aims to agree on a successor to the Kyoto Protocol.
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SECURITY FOCUS
A G7 official said France led discussion on climate while Italy took
the lead on energy security during Monday morning's talks, before
the leaders turned their attention to global threats to
international security.
The leaders of Britain, Canada, France, Germany, Italy, Japan, the
United States and European Union discussed Islamist militant threats
from groups such as Islamic State (or ISIS) and Boko Haram.
"All G7 leaders are supporting military and or humanitarian support
to counter the spread of ISIS and help stabilize the region," the G7
official said.
The G7 leaders met so-called "outreach guests" – the leaders of
Nigeria, Senegal, Ethiopia, Liberia, South Africa, Tunisia and Iraq
– and will hold final news conferences later on Monday.
On the economy, a topic addressed on Sunday, a senior U.S. official
denied a report that Obama had told the summit the strong dollar was
a problem. Bloomberg News earlier quoted a French official as saying
Obama had made the comment.
"The President did not state that the strong dollar was a problem,"
the U.S. official said. "He made a point that he has made
previously, a number of times: that global demand is too weak and
that G7 countries need to use all policy instruments, including
fiscal policy as well as structural reforms and monetary policy, to
promote growth."
(Additional reporting by Elizabeth Pineau in Paris and Jeff Mason in
Kruen, Germany; Writing by Paul Carrel; Editing by Paul Taylor and
Tom Heneghan)
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